Pennsylvania has become the third state to again close its casino industry due to resurging COVID-19 infections.
In an announcement Thursday, Gov. Tom Wolf and the state’s health secretary said casinos and other businesses would close on Saturday. The shutdown will last through Jan. 4.
“It has become clear that we need to take further action to protect Pennsylvanians and stop the spread of COVID,” Wolf said. “Today I’m announcing additional, temporary mitigation measures.
Pennsylvania joins both Michigan and Illinois with full casino closures. Michigan closed casinos on Nov. 18 in a move first expected to last three weeks; the casinos will now remain closed until Dec. 20. Illinois casinos closed indefinitely on Nov. 20.
Several additional states have restrictions on casino hours and capacity.
“While December is traditionally a somewhat softer seasonal month, the period between Christmas and New Year’s tends to drive the month and as such, the closure through this period is slightly more meaningful,” Deutsche Bank gaming analyst Carlo Santarelli told investors.
The City of Philadelphia ordered the Rivers Casino closed on Nov. 20 as part of the city’s efforts to slow the spreading coronavirus. Rivers, which is operated by Rush Street Gaming, is the only casino within city limits.
Now, other Philadelphia-area casinos, including Parx and Harrah’s Philadelphia, will close as well.
Boyd Gaming said it would comply with the order and close its Valley Forge Casino by 12:01 am Saturday. The closure will include all public operations, including the casino, restaurants, and hotel.
“We will not place any Valley Forge team members on furlough at this time,” Boyd Gaming spokesman David Strow said in an email. “Team members will continue to receive regular pay, including tips, as well as benefits through January 4.”
On March 12, Boyd was the first company in the casino industry to experience a government-ordered shutdown when the pandemic forced Wolf to order the closure of businesses in four suburban Philadelphia counties, including Montgomery County, home of the Valley Forge. The property reopened on June 26.
“As we noted with the closures in Illinois and Michigan, we think it is unrealistic to assume this is the last of the closures, especially with the light at the end of the tunnel identifiable with the vaccine in the first half of 2021,” Santarelli said.
Pennsylvania has 12 casinos and racinos and reported gaming revenues of $3.38 billion in 2019. The Philadelphia market alone ranked No. 7 among the gaming industry’s top 20 commercial markets, according to the American Gaming Association’s 2019 State of the States report.
Santarelli said the investment community has anticipated additional restrictions and closures.
“That said, when the narrative changed from cash burn and liquidity to margin improvements and sports betting, things changed for regional equities,” he said. “Accordingly, we are a bit more cautious of the potential for the currently constructive narrative to again shift back to cash burn, despite liquidity being less of an issue this time around.